Advanced Petrochemical Q1 misses estimates: Al Rajhi Cap

Advanced Petrochemical Co.’s first-quarter net income of SAR 98 million came in below Al Rajhi Capital’s estimate of SAR 152 million, the brokerage said in an earnings review on Monday.

“Weaker than expected income from its Korean associate and higher overhead costs due to shutdown contributed to the miss at the bottom-line,” it added.

Revenue stood at SAR 504 million in the same period, missing Al Rajhi Capital and consensus estimates of SAR 547 million and SAR 543 million, respectively, due to decline in sales volume amid plant shutdowns in March.

Additionally, the company saw feedstock prices rise significantly, with propane and propylene prices rising 16.3 percent and 21.9 percent year-on-year (YoY) – both slightly higher than Al Rajhi Capital’s estimates.

“Q1 revenue came below our forecast as we expected a lower impact from the pre-announced shutdown to replace the catalyst and this top-line miss was reflected in profitability," the brokerage noted.

Going forward, production rates are expected to improve in the coming quarters, but increasing feedstock prices remain a concern in the near term as oil prices continue to rise.

Al Rajhi Capital revised the stock rating to “neutral” from “overweight”, but  maintained the target price at SAR 47 per share.